Including financial protection within your company’s employee benefits package can help you attract and retain the best talent, and positively impact the morale and financial wellbeing of your employees.

Employers in the UK are legally-required to offer certain benefits to their employees. These are known as statutory benefits, and they tend to include things like a workplace pension, holiday pay, maternity and paternity pay, and sick pay.

But many employers provide far more than just the statutory minimum, often extending the overall package to include things like physical and mental wellbeing services, insurance policies and other types of financial protection.

The benefits that are often most valued by employees are those offering peace of mind

What should a good employee benefits package include?

Aside from your statutory obligations, the package you offer your employees is likely to be influenced by several factors. These will include your budget, the number of employees within your organisation, the competition for talented people within your sector, and your desire to ‘do the right thing’.

You can offer a wide range of employee benefits like funding for training or personal development, gym membership, season ticket loans for travel, childcare vouchers, company car, cycle to work scheme, or a subsidised canteen – all of which can help make your company a better place to work.

But the benefits that are often most valued by employees are those offering peace of mind, so if things take a turn for the worse, they know their employer has them covered.

Private Medical Insurance

According to a survey by Drewberry Insurance, one-third of employees say they would like private health insurance to form part of their employee benefits package. In reality, only 12% of employers offer it, so it could be worth considering if you’re looking for ways to improve and differentiate your benefits package.

As well as helping you attract employees, private medical insurance offers your employees faster access to healthcare for a range of illnesses and conditions, including mental health services. That means your business is likely to see a reduction in work absences and a positive impact on morale and productivity.

Private health insurance is often thought of as the preserve of larger organisations. But even if you’re a smaller company, you may find that private healthcare’s benefits outweigh the financial outlay.

Death in service insurance provides a financial cushion and peace of mind for loved ones left behind

Death in Service

A ‘Death in Service’ policy pays out a tax-free lump sum to your employees’ families (or named beneficiaries) if they die, whilst on the payroll. A typical policy will pay out a multiple of the employee’s salary, generally between two and four times their annual pay.

Like a life insurance policy, a death in service policy provides a financial cushion and peace of mind for loved ones left behind. This might be used to help pay off a mortgage or go towards funding other living costs.

Death in service policies can be put in place if you have three or more employees. It does need to be set up under an appropriate trust and registered with HMRC though, otherwise you may find you’re liable for a substantial tax bill.

Income Protection

An income protection policy pays a percentage of your employee’s salary if they cannot work because of a severe long-term illness or injury. It’s not designed to cover sick employees for a few days, and a minimum period of absence applies before a claim can be made.

The payment is paid to you as the employer and holder of the policy. You are responsible for paying your employee via your PAYE system, deducting the appropriate income tax and National Insurance contributions. Depending on the scheme, the policy may pay out for a set period, or it can continue until the employee reaches retirement age.

Critical Illness Insurance

Critical illness insurance pays a tax-free lump sum to an employee if they are diagnosed with a specific critical illness covered by the policy. Critical illness policies differ from one provider to another, and they may not all cover the same conditions or levels of severity. So before choosing a policy, it’s essential to know exactly what’s included.

The benefit is commonly offered to employees as a voluntary benefit, which means they contribute towards the cost as a deduction from their pay. However, some companies provide employer-funded critical illness cover to selected employees (senior management, for example).

Good financial protection means your employees can focus on their job rather than worrying about their finances

Financial Planning

As well as protection policies, some employers provide access to a financial planner or independent financial adviser (IFA). They might offer employees high-level guidance about specific topics (in a presentation or workshop), or provide a personalised financial planning service that can help put them on the path to achieve their life goals.

Giving your employees access to this level of financial help, alongside a competitive employee benefits package with good financial protection, means your employees can focus on their job rather than worrying about their finances.

Amber River Financial Planning

Amber River’s financial planners can help you choose the right benefits, policies and financial providers for your employee benefits package. Our advisers will ensure you have a robust and competitive package that helps attract new talent into your organisation and makes your employees feel fully supported and valued by your business.

Get in touch

To speak to one of our team, arrange an appointment or find out more, call 0800 915 0000, or alternatively use our contact form here.